Indonesia, China Start Using Direct Yuan, Rupiah Transactions

Beijing (Antara Bali) - Indonesia  and China would continue to push for direct transaction between the national currencies of the two nations to boost bilateral economic cooperation, an official said.

"Trade  and economic  cooperation between the two countries  would expand. Therefore, it is better for us to have direct transactions in rupiah and yuan(Renmimbi/RMB)," Minister for State Enterprises Rini Sumarmo told Antara news agency here Wednesday night.

Rini was here to attend the signing of a loan agreement between three state lenders - Bank Mandiri,Bank Negara Indonesia (BNI) and Bank Rakyat Indonesia (BRI)   with China Development Bank (CDB).

The minister said direct transactions using rupiah and yuan would protect both currencies from the negative impact of any change in demand for US dollar.

Increase in demand for dollar would put pressure on rupiah and yuan if the two countries would continue to use the US currency in bilateral transactions, she said.

Bank Mandiri, BNI  and  BRI received a total loan  of US$3 billion from China Development Bank to finance infrastructure projects in  Indonesia.

The agreement was signed by  Bank Mandiri President  Budi G. Sadikin,  BRI president Asmawi Syam  and  BNI president Ahmad Baiquni  and CDB president  Zeng Zhijie with Rini and National Development and Reform Committee (NDRC) Xu Shaoshi.

The loan  was the first part of a total loan of US$20 billion agreed between the Ministry of State Enterprises, CDB  and  NDRC, Rini said, adding there is also a loan of US$10 billion for PLN, the national power utility company.  

The three state banks had a share of  US$1 billion of the US$3 billion loan  repayable in 10 years.

"Around 30 percent of the loan would be in  Renminbi (RMB). This is the first phase. IKn the second phase the two countries agree to use direct transaction using rupiah and RMB," she said.

Budi Gunadi Sadikin said Bank Mandiri already proposed the use of  RMB  in banking transaction  by its branch in Shanghai.

"Hopefully  by the  end of this year we could start using RMB, and no longer has to use dollar  especially in banking deals in China," he said.

Achmad Baiquni said his bank already  used RMB in banking transactions in a number of facilities for debtors. (WDY)